President Donald Trump has signed a Presidential order on Saturday, which shows corporate profits and the height of inflation, to impose tariffs in the United States from Mexico, Canada, China. Investors are in a hurry to evaluate the potential impact on US markets, corporate revenue, and inflation pressure, as it is set to be effective early on Tuesday.
Details of presidential decree
The Presidential Order collects 25 % of the imports from Mexico and Canada and 10 % of Chinese products, and the White House will be implemented at 12:01 am on Tuesday. It is shown. Trump has stated that it has hardly expressed flexibility and cannot do anything to prevent tariffs from being implemented. However, he suggested that Canadian oil import could exempt 10 % of tariffs on energy supply.
Increasing concerns about market reactions
With this announcement, the investor has become an Edge. Mark Malek, the highest investment in New York in New York, has expressed concern that the market that has mainly supported Trump’s policy may be against him. “Until now, the market was really on the side of Trump, but it could change, and the market could challenge him for the first time,” said Malek.
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When rumors of tariffs spread, some investors have stuck to the hope that this may be another negotiating tactic, and the president may retreat before the customs duties are fully enforced. There is. Rick Meckler, a partner of Cherry Lane Investments, pointed out that the delay in implementation suggests that Trump may retreat from his aggressive attitude.
Economic impact
Customs duties have a variety of potential economic impacts. Barclays warriors have warned that these new tariffs can reduce the profits of S & P 500 companies up to 2.8 %, taking into account retaliation from Mexico, Canada and China. Furthermore, Goldman Sachtic Economists estimate that full tariffs contribute to the 0.7 % increase in core inflation and 0.4 % of GDP growth.
The possibility of an increase in consumer prices is that investors are worried about the resurrection of inflation, so the federal preparation system may stop the recent rate reduction cycle. Last week, the federal preparation system suspended interest rates.
Market outlook
Since the S & P 500 is close to the highest prices in history, analysts predict potential short -term volatility when the market resumes on Monday. GENE GOLDMAN, the highest investment in Cetera Financial Group, believes that high rating, impact of tariff inflation, and potential changes in Fed policy will contribute to decreasing shares and reducing risk assets. EVERCORE ISI Strategist predicts that S & P 500 can move from 3 % to 5 % in any direction because the market reacts to the expanding event.
Geopolitical risks and uncertainty
“This is one of these unpredictable major geopolitical events,” said Colin Graham, head of Robeco’s multi -asset strategy. “They just happen, and you have to understand what you are going to do.” It will be difficult for investors to predict long -term effects.
The tariffs imposed by President Trump indicates a major change in US trade policies, and brings important tests to both market and wider economy. Increased concerns about inflation and the potential confusion of corporate revenue, investors need to be alert as the situation develops. It is extremely important to determine how the market adapt to these changes in the next few days, as the next movement of the Federal Reserve may further affect the emotions of investors. That may be proven.
